Performance measures are often outlined in the section of the service-level agreement (SLA) of the contract between a supplier and a retailer. They are monitored periodically, and penalty and/or bonus payments are imposed in each performance review period, according to the SLA clauses. Previous studies have mostly considered a static inventory policy in analyzing SLAs. However, in practice, the supplier may have an opportunity to adjust the stock level in each inventory review period, according to the observed performance. This study analyzes the dynamic stocking decision for a supplier facing an SLA where the supplier sells a single product to the retailer. The ready rate is used to measure the performance in an SLA. To this end, models for both lump-sum and linear penalty/bonus structures are developed, and the optimal stocking decisions for a strategic supplier are calculated using the stochastic dynamic programming approach. The results are then compared with the optimal static inventory policy, and new insights are derived to efficiently design an inventory system for the suppliers that are subject to service-level incentives. In addition, we investigate the impact of SLA parameters—such as the length of the performance review period and incentive structures—on a supplier's performance, with the probability of meeting or exceeding the target service levels and the supplier's cost. We also consider the impact of demand distribution and inventory holding costs. Results show that under lump-sum incentives, a longer performance review period benefits both the supplier and the buyer, given that the average ready rate increases with less variability as the length of the performance review period increases, leading to decrements in the supplier's total costs. In this scenario, there is a higher chance of gaining bonuses/avoiding penalties for a strategic supplier who adopts a dynamic inventory policy. On the other hand, under linear incentives, the impact of the performance review period on the supplier's cost and the performance measure (i.e., ready rate) is complicated and depends on the magnitude of the holding cost and the bonus and/or penalty structure of the contract. Under this scheme, the performance of a static inventory policy is highly dependent on the holding cost because a high holding cost may lead to failure to meet the contract requirements in terms of the service level.

中文翻译：

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动态库存政策的服务水平协议：绩效评估期和激励结构的影响

绩效衡量标准通常在供应商和零售商之间的合同的服务水平协议 (SLA) 部分中进行概述。根据 SLA 条款，对它们进行定期监控，并在每个绩效评估期间支付罚款和/或奖金。以前的研究大多在分析 SLA 时考虑了静态库存策略。然而，在实践中，供应商可能有机会根据观察到的表现在每个库存审查期间调整库存水平。本研究分析了面临 SLA 的供应商的动态库存决策，其中供应商向零售商销售单一产品。就绪率用于衡量 SLA 中的性能。为此，开发了一次性和线性罚款/奖金结构的模型，并使用随机动态规划方法计算战略供应商的最佳库存决策。然后将结果与最佳静态库存策略进行比较，并得出新的见解，以有效地为受服务水平激励的供应商设计库存系统。此外，我们调查了 SLA 参数（例如绩效评估期的长度和激励结构）对供应商绩效的影响，以及达到或超过目标服务水平的可能性以及供应商的成本。我们还考虑了需求分配和库存持有成本的影响。结果表明，在一次性激励下，较长的绩效评估期对供应商和买方都有好处，考虑到随着绩效评估期的增加，平均准备率会随着变化的减少而增加，从而导致供应商的总成本减少。在这种情况下，采用动态库存政策的战略供应商获得奖金/避免处罚的机会更高。另一方面，在线性激励下，绩效考核期对供应商成本和绩效衡量标准（即就绪率）的影响是复杂的，取决于持有成本的大小以及供应商的奖金和/或惩罚结构。合同。在该方案下，静态库存策略的执行高度依赖于持有成本，因为高持有成本可能导致无法满足服务水平方面的合同要求。